Tax Liens

Today, I went to a short tax lien class ($30 for 3 hrs). It was a class not a seminar so the guy wasn’t trying to sell anything. Here is what I learned:

1. If you buy a tax lien you are not buying the property, you are buying the homeowner’s state tax debt.
2. If the homeowner decides to pay his taxes then the homeowner goes to the state to pay you back. The homeowner has to pay the delinquent amount plus 8% per year. 8% is for Oklahoma. Some states have a higher interest rate.
3. Once the homeowner has paid the state. The state mails you the check and you don’t have to ever talk to the homeowner. (A big plus).
4. This part I was a little confused about…. But, after three years and said owner hasn’t paid his taxes then a tax deed is issued and then you (the tax lien holder) can bid on the property for complete ownership.
5. If the homeowner decides to sell the property or someone else is awarded the deed then the buyer of the house has to pay you (the lien holder) the taxes plus interest in order to complete the transaction.
6. “On the first Monday in October, the County Treasurer sells the tax lien certificates for delinquent taxes”
7. Downfalls of buying a tax lien: You may never get your money back but the average person/family moves every seven years, so the odds are in your favor.

He also talked about Foreclosures and Real Estate Investment (REI) Trusts but not much. He’ll be teaching another class on foreclosures. I think I’ll attend just for the information.